Internet technologies have fundamentally transformed the structure of traditional brick-and-mortar retailers and several other industries. In what *BusinessWeek* calls the "first wave of Internet disruption," companies like Amazon, Expedia, E*TRADE, and the former CDNow (purchased by Amazon) revolutionized the way books, travel, investments, and music were sold through affiliated marketing programs (*e-Biz Strikes Again! 2004*). The disrupted industries in this first wave developed effective marketing tools offering tangible products that could be easily compared and purchased at the lowest price.
In this environment, marketers are eager to know which internet marketing tools will drive top-line sales and bottom-line profitability. A wealth of exciting new opportunities exists for making money when combined with the best affiliate programs, which can be seen as the ultimate gold rush of the Internet era. The first generation of e-business was akin to a gold rush. New startups and established businesses alike created an online presence and experimented extensively. Many companies implemented internet-based strategies designed to generate revenue, but only a few achieved significant profitability. By early 2000, one estimate listed 21 firms with 12-month sales growth between 100% and 500%, yet all had negative profits. Between early 2000 and 2002, however, over 500 Internet firms shut down in the United States alone during the so-called dot-com bust. Interestingly, by the fourth quarter of 2003, nearly 60% of the public dot-com companies that survived the bust were profitable.
Internet technologies have fundamentally altered the structure of traditional brick-and-mortar retailers and several other industries. In what *BusinessWeek* refers to as the "first wave of Internet disruption," companies such as Amazon, Expedia, E*TRADE, and the former CDNow (acquired by Amazon) transformed how books, travel, investments, and music were sold via affiliate marketing programs (*e-Biz Strikes Again! 2004*). The disrupted industries during this first wave generated effective marketing tools offering tangible products that could be easily compared and purchased at the lowest price.
Having experienced the boom and bust in developed nations (while the Internet remains the best money-making tool in many emerging economies), we are now entering the Plateau of Profitability. Marketers are returning to their traditional roots, relying on well-grounded strategies, effective marketing practices and tools, along with the best affiliate programs, using information technology in ways that ultimately lead to the most profitable programs—no more throwing money at ideas that don't yield the desired return on investment. During the dot-com shakeout from 2000-2002, the industry saw significant consolidation. Some companies, like Levi Strauss, stopped selling online due to inefficiency and channel conflict. Now is the time for businesses to demand and profit from the best affiliate marketing programs and Internet strategies.
Today, the Internet is mainstream in industrialized nations. High adoption rates are occurring in the 20 countries that account for 90% of all Internet users, and most of these populations cannot do without the Web or email. Additionally, most organizations recognize that they must incorporate information technology into their marketing strategies and apply marketing tools effectively to meet market needs efficiently and competitively. Marketers who understand what internet technologies can do are best positioned to integrate Internet technology into marketing practice by applying effective Internet marketing tools; mediating technology, increasing global reach, equalizing information, sensing affiliate programs, scaling capacity, ensuring open standards, deconstructing markets, and initiating task automation.
Compare these properties to those of the telephone. The telephone is a mediating technology with global reach and network externality. In contrast, the internet possesses properties that create opportunities beyond those possible with the telephone, television, postal mail, or other communication media. These differences excite marketers and make them wonder how to convert them into the best internet money-making program.
In this environment, marketers want to know which internet marketing tools will result in top-line sales and bottom-line profitability. Plenty of exciting new opportunities lie ahead for making money when integrated with the best affiliate programs, which can be viewed as the Internet: the Ultimate Gold Rush.